It may depend on variables such as when the lender starts the process. That said, lets cover how the process works.
As you know, foreclosure is a legal process in which a lender (whoever you got your mortgage loan through) decides to seize and resell your home after a certain amount of missed payments. There are a few steps in between missing payments and having your home foreclosed. Each state’s process can be slightly different than what the federal government states.
The entire process starts with a missed payment. As soon as you begin missing payments, lenders begin the process of monitoring your account and prepare to take action after a certain period of time. In Michigan, lenders cannot begin the foreclosure process until at a specific number of days after your first missed payment. If this is not enough time for you to get back on top of your missed payments, the process will continue.
After the 120 days has passed since your last payment, your lender can now send you a Notice of Default letter. This will be a public notice that is sent through your County Recorder’s Office.
Once you are sent the Notice of Default, you typically have some time to either work something out with your lender (options covered later) or fully pay back your missed payments. If you are able to pay back the missed payments, the foreclosure will end and you will continue paying off your house as normal. If you are not able to do either, your foreclosure will proceed.
In Michigan, foreclosures may happen quickly. In fact, most houses are put up for auction after a Notice of Default. The lender will set a date for the house to be auctioned on, during which time you still maintain the right of redemption, meaning, if you can bring cash that covers the outstanding balance in your loan, the foreclosure auction will be stopped. If you cannot do this, the house will be sold to the highest bidder with cash payment. Oftentimes, the bank will buy back the house if there are no cash bidders.
If a third-party doesn’t end up buying the house, and the bank or lender now owns the property, they will continue trying to resell it. During this time, if you are still in the house or property, the new owners can have you evicted.
While avoiding the threat of foreclosure altogether is the best decision, it can be hard to stay on top of your payments when life happens. Because of this, we know it’s important to have ways that can help stall or even stop foreclosure from happening. Let’s take a look at some steps you can take to save your home from foreclosure.
While these options are all viable and something you should look into if you are facing foreclosure, there are some other tips that are important to keep in mind:
DON’T ignore the calls, letters, and emails from your lender after you miss a payment. Almost all of the options for delaying or working around foreclosure involve working closely with your lender. This means that having an open and honest line of communication will almost always be better than ignoring their attempts to reach out.
The only thing that happens when you ignore your lender is moving closer and closer to foreclosure. Instead, immediately respond to your lender, let them know your situation, and see if they have anything that can help you. Lenders know it is typically more cost-effective for them to allow you to pay off your loan in unique ways than it is for them to go through the foreclosure process. But they can’t help you if you are avoiding talking to them at all.
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